THE recent change in pension rules which allows older people to withdraw substantial cash out of their schemes is tipped to have a lucrative spin-off in the automotive sector.

Cars ranging from classic convertibles to brand new superminis could be the target of older people who "treat" themselves using cash released following revised pension regulations that come into effect this week.

Experts from trade bible Glass's are predicting that, with hundreds of thousands of older people predicted to draw a tax free lump sum out of their pension pot, some of this money will inevitably be spent on cars.

Rob Donaldson, of Glass's states: "There is really no precedent for this, so it is difficult to forecast the exact effect that it will have on the new and used car sector, but it seems likely that a proportion of older people will use the new rules to treat themselves.

"The kind of deals that might be made could range from someone buying a Ford Fiesta or Hyundai i10 as their 'last' new car through to others splashing £3,000 on an old MG TF or Mazda MX-5 for some summer fun. This could then provide a boost for dealers, especially in areas where a lot of pensioners live."

Although the streets may not be lined with Aston Martins, there is without doubt going to be a lot of money spent on cars.

This may buck the current market trend towards leasing as sales would be, by their nature, cash transactions.

It will certainly be interesting to see what happens and how the trade will respond to what is certainly a unique set of circumstances.